Kangs Solicitors has a team of lawyers experienced in dealing with all types of insolvency related matters.

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In the current uncertain economic climate, a common scenario that we are asked to advise on is:

‘’If my customer enters the insolvency process (administration or liquidation) and has not paid for the goods provided by me but has sold them on to another business, can I recover the debt due to me from the business that is holding the goods that I originally supplied?’’

In this commonplace scenario the simple answer is ‘no’. 

You cannot simply go to the end customer and uplift your goods or ask to be paid by the end customer.


There are two main reasons:

  • The end customer cannot be asked to pay twice, and
  • There exists what is known as ‘Privity of Contract’.

Privity of Contract | Retention of Title Clause | Insolvency Solicitors

Generally speaking, unless there is a direct relationship between you and a particular party, you have no entitlement to enforce the terms of any contract and/or seek the benefit of the contract.

There is a slight caveat to this in limited circumstances where you can show that you have a valid ‘all monies retention of title clause’.

An all monies retention of title clause is enforceable where a supplier of goods has stipulated within its Terms and Conditions, clearly set out in the contract entered into with the customer, that it retains the full title (i.e ownership) of those goods until they have been paid for in full.

Important Aspects of Retention of Title Clauses | Kangs Insolvency Solicitors

  • The Terms and Conditions must be provided to a customer each and every time an order is placed.
  • The real benefit of an “all monies retention of title clause” arises where multiple orders have been delivered to the same customer and money is owed on certain orders.  The supplier may claim back any goods, clearly marked as being owned by the supplier, irrespective of certain goods delivered under varying orders having already been paid for.
  • You can only enforce a retention of title clause if it is incorporated into the supplier’s written terms and conditions.
  • The onus is on the supplier to evidence that a valid retention of title clause forms part of the terms and conditions of each and every transaction.

What if there is no Retention of Title clause? | Specialist Insolvency Solicitors

Without a retention of title clause, a supplier will simply rank as an unsecured creditor upon any insolvency.

Unfortunately, this will be the position with many suppliers.

What is the position of an Unsecured Creditor? | Kangs Insolvency Experts

The ability of an unsecured creditor to recover the debt owed to it will be dependent upon the level of assets available for realisation (i.e. to be collected and sold) against the level of assets that the insolvent company may have.

It is possible that the unsecured creditor may receive:

  • all of its outstanding liability,
  • a pro-rata sum, or
  • nothing.

What Can You Do To Help? | How Can I Contact You?

Our team of insolvency lawyers is experienced in dealing with all issues regarding retention of title clauses, secured creditors and unsecured creditors. We are used to working with and against Insolvency Practitioners in such circumstances.

Stuart Southall | Head of Dispute Resolution
0121 449 9888 | 020 7936 6396

Tim Thompson
020 7936 6396 | 0121 449 9888

Naz Maqsoom
0121 449 9888 | 020 7936 6396